Freight Forwarder Insights

COST INSURANCE & FREIGHT INCOTERM （CIF）

by:

Huin International Logistics

In:

Shipping dictionary

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Created:

25 Jan 2024

What is Cost Insurance Freight (CIF)?

IF is one of the 11 International Commercial Terms (Incoterms) used in trade, where the seller is required to:

1. Arrange and pay for the insurance of goods in transit at 110% of the declared value.

1. Arrange and pay for transportation costs from the factory to the final port of import.

CIF terms are only applicable to ocean freight shipments.

Point of Risk Transfer!

When the goods are loaded onto the main ship in the port of export.

When should you choose CIF?

CIF is most commonly used for bulk cargo, oil, and oversized or overweight shipments.

Cost allocation - who should pay what under CIF:

What is the difference between CIF and CFR?

The only difference is insurance!

Under CIF, the seller is legally obligated to buy insurance for the goods at 110% of their value.

Under CFR, there is no legal obligation to buy insurance but the buyer is welcome to do so if he wants.